Mumbai: The bank will increase the issuance of Rupay Debit Cards and promote its use for payment transactions with the government approve Rs 1,300 Crore to provide home card network incentives along with an integrated payment interface (UPI).
Costs will also help Fintech smaller squeezed out of Race upi because they cannot burn in cash burned by multinational giants.
Last week, the government ended the two-year zero-fee policy that had been adopted since December 2019.
Under the scheme announced, the bank that installed a card swipe or QR code in stores would be grabbed by the government by paying a.
The percentage of the value of the transaction carried out through the Rupay Debit Card and low-value BHIM-UPI payment mode, on the estimated financial expenditure of 1,300 crore for one year from April 1, 2021.
The merchant bank will, in turn, passing part of the income to the card issuing bank.
Government Notification On December 17 said that, on Rupay Debit Card Transactions (on card sliding machines in shops and e-commerce sites), the Bank will get 0.4% of the total transactions with RS 100 ceiling.
For UPI use Online shops and transactions, banks will get 0.25%.
For the use of Rupay or UPI cards for / about insurance purchases, mutual funds, government, education, train, agriculture, fuel, jewelry, and hospitals, banks will only get 0.15% limited to Rs 6 per transaction.
For UPI, incentives will only be paid for transactions under RS 2,000.
The bank must also show at least 10% growth year-on-year in Rupay transactions and 50% growth in UPI.
“The public sector, which is the main publisher of Rupay cards, loses.
Now at the cost of back in place (as in the case of MasterCard & Visa), even private banks will begin to push Rupay,” said a senior banker.
According to payment service providers, replacement will promote innovation in Fintech as well.
At present, among third-party applications, UPI payments are dominated by Walmart’s Google Pay and PhoneEPE.
“This industry has had a part of the problem since the ‘Zero MDR’ announcement (discount merchant level), but they will greatly benefit from the initiative of the replacement of this transaction costs imposed on digital payments, which will help them improve payment infrastructure in this country, so it increases Financial inclusion, “said Vishwas Patel, chairman of the Indian payment board and Avenues director.
MDR is a fee paid by the shopkeeper to the card company.
This fee is shared between the card issuing bank, the bank that installs a point-of-sale engine and network card.
This is MDR which includes cashback costs and other promotions for debit card use.
Previously, before the prohibition on the cost for the Rupay card, the cost ranged from 0.3% to 0.9%, depending on the size of the merchant.
After the imposition of prohibitions, the bank stops promoting Rupay card transactions because they must bear all costs.
Government funds to increase the use of Rupay, UPI
